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Project Development Update
Conference Call
Project Development Update
Conference Call
080710
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Integrated and diversified generation portfolio
Size (MW) MPX (MW)
Coal 5,900 5,540
Natural Gas 3,300 3,300
Hydro 380 260
Diesel 23 12
9,603 9,112
UTE Porto de Itaqui (Maranho)(360 MW + 360 MW)
UTE Porto do Pecm (Cear)(720 MW + 360MW)
UTE Porto do Au (Rio de Janeiro)(2,100 MW + 3,300 MW)UTE Castilla (Chile)
(1,400 MW)
UTE MPX Sul
(Rio Grande do Sul)(600 MW)
UHE Baixo Iguau (Paran)(350 MW)
UTE Serra do Navio (Amap)(23 MW)
PCH Capivara (Amap)(30 MW)
* Already considering 100% of UTE Au and UTE Castilla, according to the relevant fact released on February 20, 2008
Coal Mines Colombia
MPX will be a leading integrated and diversified energy producer
Seival Coal Mine(Rio Grande do Sul)
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Brazilian Power Market OverviewBrazilian Power Market Overview
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Spot Prices Indicate Need for New Capacity
Rationing in
2001:consumptiondeclined to 1998levels.
Short-term situationaggravated bystructural deficit.
ENA in the month ofJanuary 2008 was the2nd worstin the data series average spot priceclose to the ceilingprice
History Southeast (~ 60% of the Brazilian market)
Rationing result: structural energy surplus (decline in
consumption + Thermoelectric Plant Priority Program(PPT)), combined with subsequent favorable hydrologicalperiods low spot prices.
Spot price LoadENA(Hydropower)
EAR(Stored Energy)
GWavg
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Forecasted Marginal Operating Costs (CMO)
218.87218.43164.16128.1588.60North
212.00219.75161.38133.4890.44Northeast
261.05230.61176.91142.1086.88South
267.55240.55178.14141.3276.47Southeast/Midwest
20122011201020092008SUBSYSTEM
Base Scenario CMO (R$ / MWh)
70
110
150
190
230
270
2008 2009 2010 2011 2012
Southeast/Midwest
South
Northeast
North
R$/M
Wh
Source: ONS
MPX will have over
2,600 GWh in energyavailable for sale in
2011, from Itaqui andPecm plants
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MPX BrazilMPX Brazil
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Contract price: US$ 503.5 million
EPC contracts assure the start up of the operations in 2011 Bonus mechanisms to accelerate COD1
Down payment for long lead items already made
Civil works to start in Nov 2008
EPC
Eligibility for BNDES and IDB financing secured
BNDES and IDB due diligence phase starting on July 14
Bridge loan contracts of US$ 160 million
Funding
Preliminary License granted by State EnvironmentalAuthority
3 Public Hearings in the State of Maranho finalized andissues raised addressed by the environmental study
IBAMA cross-checking entire process
Installation License shall be jointly granted by StateAuthority and IBAMA before Oct 2008
Licensing
315 MW sold in the October 2007 auction A-5 Full pass-through of fuel costs to energy prices
Annual Fixed Revenue of R$ 231,3 million 2 (escalated byIPCA3)
Energy sales
Details
UTE Porto de Itaqui
Fuel: Coal
Location: Maranho State, Itaqui Port
Shareholder: 100% MPX
Start-up: Aug/11
1. Commercial operation date2. As of June 20083. IPCA = Consumer Price Index
UTE Porto de Itaqui - 1st phase (360 MW)
Potential Upsides
Coal trading spread
Coal freight spread between Colombia-Brazil and Africa-Brazil
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UTE Porto do Pecm - 1st phase (720 MW)
Contract price: US$ 935.9 million
EPC contracts assure the start up of the operations in 2011
Bonus mechanisms to accelerate COD1
Down payment for long lead items already made
Construction started in early July 2008
EPC
Eligibility for BNDES and IDB financing secured
BNDES and IDB due diligence phase starting on July 14
Bridge loan contracts of US$ 270 million
Funding
Installation License Issued Construction under way
Licensing
615 MW sold in the October 2007 auction A-5
Full pass-through of fuel costs to energy prices
Annual Fixed Revenue of R$ 437,5 million 2 (escalated byIPCA3)
Energy sales
Details
UTE Porto do Pecm
Fuel: Coal
Location: Cear State, Pecm Port
Shareholders: 50% MPX / 50% EDP
Start-up: May/11 (360 MW) + Nov/11 (360 MW)
Potential Upsides
Coal trading spread
Coal freight spread between Colombia-Brazil and Africa-Brazil
1. Commercial operation date2. As of June 20083. IPCA = Consumer Price Index
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UTE Porto do Pecm - 2nd phase (360 MW)
Negotiations under way with consortium composed byEFACEC, BC Projetos and led by Maire Engineering. Boilersto be supplied by Doosan Babcock and Turbines by
Siemens, both major players
MoU to be signed before A-5 auction, scheduled for lateAugust 2008
EPC
Public hearing for Preliminary License finalized in May 08
Preliminary License to be issued in Jul 2008
Licensing
Full capacity registered for A-5 auction, scheduled for lateAugust 2008
Energy sales
Details
UTE Porto do Pecm
Fuel: Coal
Location: Cear State, Pecm Port
Shareholder: 100% MPX
Start-up: 2013
Eligibility process started with BNDES
Funding
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Fuel: Coal
Location: Rio de Janeiro State, Au Port
Shareholder: 100% MPX (future strategic partner)
Start-up: Jul/12 (700MW); Jan/13 (700MW); Jul/13 (700 MW)
EPC
US$ 500 million firm commitment from Santander
US$ 500 million firm commitment from Unibanco
Bridge loan contracts of US$ 200 million
Financial advisory agreement with Santander Eligibility process started with BNDES
Funding
Public hearings for Preliminary License scheduled for July14 and 15
Preliminary License to be issued in late July 2008
Licensing
Participation in A-5 energy auction
Sale to Free Market within the self-production concept,with option to contract capacity - Negotiations under way
Energy sales (planned)
Details
UTE Porto do Au MOU to be signed in early Aug 2008
Reservation fee to long lead items in order to secureproject schedule
UTE Porto do Au 1st phase (2,100 MW)
Credit Suisse mandated to find strategic partner
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Free Market - Shared self production + Capacity option
Competitiveness in Free Market enhanced by adding option to contract capacity
CoalSupply
UTEPorto do Au
Availableaverage MW
Self-ProducersQuota
Q1
Q2
PlantsOperations
Management ofEnergy Requirements
Quotas of each offtakerQuotasself-producer 1
Quotasself-producer 2
Quotasself-producer N
FreeConsumersOR
Capacity Pmt
(fixed)
+
Variable cost
(if dispatched)Qn
Q3
Quotasself-producer N
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Chilean Power Market OverviewChilean Power Market Overview
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6.000
9.000
12.000
15.000
18.000
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Expected Capacity
Required Capacity
Forecasted Supply/Demand Balance (MW)
Energy Demand Increasing Faster than Supply
Source: Santander, CNENote: Projections include only mayor projects such as LNG plants and Hydroayn
Source: CNE.
Expected Sales (Th. GWh)
05.000
10.00015.00020.00025.00030.00035.00040.00045.000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Free Clients Regulated Clients
6.4%
5.5%
Coal generation projects will have to cover the gap betweenincreasing energy demand and projected supply.
Strong growth in industrial clients energy demand (miningcompanies) as well as power auctions of distributors from
2012 onward (regulated clients) secures significantopportunities in the SIC for the next decade.
Supply / Demand Gap
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MPX ChileMPX Chile
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Fuel: Coal
Submarket: SIC
Location: 3rd Region, near Copiap City
Shareholder: 100% MPX (future strategic partner)
Start-up: Jul/12 (350MW); Jan/13 (350MW);Jul/13 (350 MW); Jan/14 (350MW)
EPC
Funding
Environmental process started in Sept 2007
Environmental Impact Assessment to be filed at CONAMA(Environmental Authority) in 3Q08
Installation License to be issued in 1Q09
Licensing
Binding agreements expected for end of Sept 2008
Energy sales
Details
4 proposals under evaluation
EPC selection process to be closed by Aug 2008
Reservation fee for long lead items
UTE Castilla
MPX Chile - UTE Castilla (1,400 MW)
US$500 MM long term financing from Santander
Bridge loan contracts of US$ 100 million
Santander mandated to find strategic partner
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Coal SupplyCoal Supply
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0
2
4
6
8
10
12
14
2008 2009 2010 2011 2012 2013 2014 2015
Coal Supply Forecasted Ramp-up
Studies and definition of
logistics alternatives
Full Capacity*12 Mtpy coal production
Cerrejon andCesar
Departments
ExplorationAUG/2008
On GoingExplorations
including possibilityof new acquisitions
2009/2010
Colombianmines
productionstart-up
1.5
4.0
10.0
12.0 12.0
Colombian properties already acquired
MPX has made significant progress in order to secure coal supply to its plants
Coal ProductionTon (MM)
New acquisitions * Not including Seival Mine
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MilestonesMilestones
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